Industry 4.0 and Bosch Australia

This is the first of a 2 part past covering the SEBN (South East Business Networks) business breakfast just before Christmas 2016. The first speaker was Gavin Smith of Bosch Australia. His talk was title “Life After Auto” and here is my summary.

Gavin Smith – Bosch Australia

In the 1960s you could make anything in Australia because the import tariffs were high and we were a long way away from the rest of the world. But by 2008 all that had changed. Although Robert Bosch is the largest tier 1 automotive supplier in the world, and the largest automotive company that doesn’t assemble vehicles, the original Bosch Australia factory is no longer there and a new one built and they are about to expand again.

So there is a lot of change. He also quoted Jack Welsh of GE fame: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near”!

High volume no longer has to be a lot of the same thing. They are now doing high mix electronics manufacture and are about expand that as they have run out of capacity. This follows the Industry 4.0 model rather than traditional manufacturing. The design team is also expanding s they are now do bespoke product design with the intention of making them locally.

Bosch are also keeping track of the following Megatrends:

Demography

Urbanisation

Energy and climate

Connectivity

Bosch – Megatrends

And all of this relies heavily on IoT (Internet of Things) devices and Big Data. To be a global supply chain player or to have a modern product you will have to have connectivity and visibility of every part of your process and your supply chain as well. And for Industry 4.0 you will especially need it for inside the factory. This is already happening.

Robert Bosch are also looking at incubation for new ideas internally and also externally. This is a great idea and something we are also doing with both clients and prospects.

They are also looking to attract more women into STEM (Science, Technology, Engineering and Maths). Something I am also keen to see happen.

Industry 4.0 example

Gavin finished with a video that showed just how streamlined the Design to Manufacture path could become. Something essential to the realisation of a true Industry 4.0 mass customisation.

While it is worth remembering that some of the above is a view of how the Industry 4.0 future could be, rather than what today looks like, Europe have been pursuing this trend for 15 years. So we have quite a bit of conceptual catching up to do as well as implementation capability. And we need to start early which is why the Casey Tech School project and Schools of the Future are so important.

Schools Today

The modern school as we know it was designed to provide workers for the expanding paradigm of the Industrial Revolution. That is, the first Industrial Revolution. We are now up to the Fourth Industrial Revolution, also known as Industry 4.0. So how well are we doing 3 Industrial Revolutions later?

Industry 4.0

First of all, lets look at the positives. Basic education has been an overwhelming success. A foundation level of literacy, numeracy and essential mathematics skills has served us really well for several generations. And it will continue to though the need for it is reducing because so much of our modern world does a lot of this for us. This is of course the developed world. We still have a third of the planet living in abject poverty and that is a challenge in itself. But the baseline education we all get at primary school works for the vast majority of people. I know there are exceptions who have both physical and intellectual challenges but it works on the whole.

So where is the issue?

Applied Learning

The real issue is when we start to get past basic education, the foundation we all benefit from, and start to move into Applied Learning or Interest Based Learning. Someone who is going to be a brilliant dancer might not benefit so much for advanced mathematics training. So we already allow for this in course selection. By VCE and the like there is a lot of selection going on. The same at University.

The issue comes back to what we are preparing students for. Funding policy drives a lot of decisions. You can’t keep a school open if the subjects you teach or how you teach them are not aligned with the funding model. You may not even get a sick bed or enough toilets (yes I know of one example of this)! And at present. we don’t seem to have governments with a strong view to to doing anything in schools except exclude faith and culture based learning and enforce the idea that alternative sexual orientations are preferred. At least this is how it looks to the community. And all this means we are not equipping students for the Jobs of the Future or the Industries of Tomorrow (or even today in many cases).

I present to Secondary Schools and Universities including MBA programs and recently to a Primary School. Schools matter. So it is time to start fixing a broken system. And it isn’t teachers and principals I am talking about here, it is funding policy.

Universities are funded based on peer reviewed papers and student numbers by class type. There is no requirement for either to be industry relevant. This has been the case for a while and we now find ourselves where this funding policy leads:

Australia has the lowest rate of publicly funded research commercialisation in the world

Australia has the lowest rate of academia to Industry engagement in the world

Put differently, the currently funding put into public research and academia structures is failing completely. The model is broken. And I’ve heard this repeatedly for the past half a decade so it isn’t just me.

Digital Readiness

Yet Digital Literacy in Australia continues to decline as the rest of the world gets ready for the next round of jobs and value creation while we fall behind. Everyone agrees that this is the wave of the future. But no action. The last policy discussion was in 2008!

The latter has this graph of our current ranking in Digital Competitiveness (we used to be known as the country of early adopters).

Australian Digital Competitiveness

I hope you notice that the most competitive economies in the world are also the most digital ready! Check out the Global Competitiveness Report summarised on Wikipedia to see the relativities. This is also why the current destruction of the capability of the NBN, or National Broadband Network, looks like economic sabotage when you consider how it is going to limit jobs growth potential and further stifle Digital Readiness.

It isn’t like this problem is new or not understood. It seems the current policy split is between:

if it costs money you can’t have it because we can’t afford it

protecting the borders is more important than ensuring there is something worth protecting inside them

lets redesign our social fabric because we can

Yes I know I have shown them in extreme profile, but this is where these ideas ultimately end up. And none of them are in the interest of Australia’s long term future. I don’t think being Digital Ready for the Future is restricted to a single gender, ethnic group or demographic nor mandated or precluded by your faith background or sexual orientation or any of a large number of other factors.

“Tomorrows jobs will be created by the workers, not companies“. Ray Keefe 2016.

You will see a similar quote below for primary schools. But this is the new paradigm. It is already here. This isn’t tomorrow. This is now. What is a Lean Digital Startup? It is creating your own job!

So this has been a long post already but there is one more element I want to share. And this is an initiative which I am hoping will be able to make a difference.

Tech Schools

No this is not a nostalgic return to the past, just using the same name for a very new approach.

I am pleased to announce that the Casey Tech School Strategic Charter was signed last week. I am one of 2 Industry Representatives involved in the process. Hopefully this will grow significantly once the foundations have been firmly established. And this same process is happening in other regions of Victoria.

So if they are reusing the name, what are they now using it for?

The Casey Tech School will use funding from the Victorian State Government to establish an advanced learning center to augment existing schools. This will include Digital Ready learning opportunities and will support student interest learning and not just a fixed curriculum. The details of how to get this high leverage education facility interfaced with existing school activities is still to be worked out. But the core idea is that if there isn’t enough money for every school to do this independently, then spend one lot of money and let every school take advantage of it.

Here are a couple of photos of the event.

Casey Tech School Charter Signed

Successful Endeavours Support the Casey Tech School

And this isn’t the only interesting school initiative going on right now.

Primary Schools Step Up

As an example of where primary school teaching is going, I was recently involved in a Mini-Mart run by Dandenong Primary School. The Grade 5 students did a survey of the grade 3 and 4 students to determine goods they could design, build and sell to them. There were rules covering design elements, what constituted a sufficient offering and even things like Warranty. Then they made the goods, set up stalls, and in a series of waves tried selling to the same grade 3 and 4 students they had surveyed.

Brilliant.

And in between waves, they got advice on OH&S, selling and influencing techniques from a teacher who could have been presenting to an MBA program. I had to wait another 40 years after my Primary School experience before I got training in business skills as good as this. Needless to say, I was very impressed and it made me wonder why we aren’t doing this across the board.

Mini-market moguls

Dandenong Primary School’s Grade 5 and 6 students have explored the process of creating, producing and marketing their own products.
The students hosted a mini-market as part of their school studies, surveying students from Grade 3 and 4 to see what products would sell and then competing to see who could sell the most.

“These children are going to have to invent their own jobs…”

The result was an impressive array of fun and appealing items from bookmarks and fridge magnets to squishy balls and multi coloured slime.

The event was supported by four local employers who judged each team on their product design and quality, stall design and customer service.

Ray Keefe from Successful Endeavours was joined by Anthony Di Battista from Hilton Manufacturing, Marcus Barber from Looking Up Feeling Good and Chelsie Dickson from Cirque Design.

“These children are going to have to invent their own jobs so it’s great they’re thinking about this very important challenge now,” Mr Keefe said.

Dandenong Primary School looks set to produce some impressive entrepreneurs of the future if the
success of this project is anything to go by.

Jobs of the Future

And if you want a really interesting view of what this could be like 10 years from now, I recommend readings Rainbow’s End by Vernor Vinge. Enjoy. Its not just the education component, its the whole idea that jobs just wont exist any more!

IoT Electronics

The Internet of things, or IoT, is driving semiconductor manufacturing at a faster rate than any previous technological revolution. Just last year the 2020 IoT Economy was estimated at $1T. This year, it has doubled to $2T. Here are some facts I’ve gathered about this industry.

2014 – $180B in revenue

Today – more machines online than people

2020 – $2T in revenue (eg. > Aus GDP Today)

Affects every economic sector

Peak growth year is projected to be 2016

Largest growth industry in history

Compound growth > 15% per annum

Why I am interested is that we design products that fit this category, and like any business owner, I want to understand where the market is going and what new opportunities I should be taking advantage of. As an electronics engineer I am interested in the technology itself and what design skills are needed to work with it.

It has become so important it has its own term, IoT Economy.

According to BI Intelligence IoT Report, within 2 years the number of new electronics devices manufactured for the Internet of Things will exceed all other sectors combined!

IoT Growth Projections

IoT Growth

So we are looking at the fastest economic growth trend ever for electronics. And there are several good reasons for this:

This combination allows low cost, low power, communicating devices to be everywhere. In just 1 year, the projected growth doubled from $1T in 2020 to $2T in 2020.

Electronics Design for the IoT

I’ve shown an example of one driving force for IoT Growth and that is low power IoT Remote Telemetry. The Electronics Design required for this is something we are now doing every single day. Of the 20 projects we are working on right now, half of them are for the Internet of Things. In the photograph below which was taken for some for some PR for the City of Casey, every single award was for design of a device or the web services needed to support devices for the Internet of Things.

IoT Awards Successful Endveavours

Above you can see some of our team. The certificates they are holding are from the past 14 weeks starting with the National Manufacturing WeekEndeavour Awards from the end of May. So this is also our biggest growth area.

Internet of Things

The Internet of Things, or IoT as it is abbreviated to, is still an emerging trend. But it is driving some substantial changes in some industry areas. This includes the 4th Industrial Revolution, also known as Industry 4.0.

If you are deploying to a factory or industrial complex, then generally the networking and power is already dealt with and you can piggy back off the existing infrastructure. But what about deploying Remote Telemetry? If you wanted to measure water tank levels or water usage in a rural location you might have to use a solar powered or primary battery powered system and 3G or 4G communications to get the data back to a website or server. That can have its own challenges. The typical industrial computer used for these monitoring tasks and posting reports or transactions requires a lot of power to run and is expensive. So can you do it if the budget for the hardware is $600, you don’t want to use solar cells and also don’t want to change the batteries every month?

The 4th Industrial Revolution

This is the first in a series of posts looking at the 4th Industrial Revolution that is now upon us. To understand why this is a big deal, it is worth looking at the previous 3 Industrial Revolutions.

This material is based on presentations made by Dr. Martin Schlegel who is a consultant providing regular updates to the South East Business Networks as well as working with overseas organisations working in this area. He even has clients in Germany.

Industry 4.0

Industry 1.0

This is the first of the mechanical automation to create a huge breakthrough in productivity and consistency of production. The earliest examples are steam and water driven textile mills and weaving machines. These completely change the way cloth was produced in the 1800s.

Industry 2.0

This is the production line. Now you might immediately think of Henry Ford here, but he was not the first by a long shot. Early examples are meat production moving away from shopping blocks where all of an animal was butchered to a line where at each station a different step of the butchering took place.

Regardless of the example, the modern production mass volume technique was now in play.

Industry 3.0

In the 1970s the advent of computers and PLCs meant that production lines could be controlled by IT systems. And with Electric control for many processes this allowed automation of production activities at an unprecedented level. With QA systems and the ability to do automated inspection you could guarantee quality at very high production rates. This dropped the unit production to lower levels than was possible in the past.

And this is as far as many have gone.

Industry 4.0

We have smart machines, sensor that communication, high data rate wired and wireless networking and a range if identification technologies including optical and RFID. If you put that together with Industry 3.0 automation and IT systems you can now have Mass Customisation. Industry 3.0 focused on high volume, low mix, high quality manufacture. Industry 4.0 takes that and adds high mix, self maintaining machines, automated order to delivery scheduling and the ability to create reliably customised product just as readily and cost effectively as Industry 3.0 ensured reliable quality of high volume products.

Internet Of Things

Although Europe, and Germany and Switzerland in particular, have been looking at this for 15 years now; the difficulty with getting the language clear and the benefits obvious shows that we are still in the emergent phase. The Cincinnati meat processors might have shown the world what was possible in the late 1800s, but adoption took time. The adoption time will be less with this next revolution because of modern technology but it will still take a while for us to fully comprehend the advantages and to establish best practice. The biggest change will be in our thinking.

For some useful extra reading on the topic, I recommend the following articles: